Britannia appoints new CEO amid faltering volume growth

FMCG giant Britannia Industries, one of the country’s oldest consumer goods companies, is making some key changes in its management lineup. While Rajneet Kohli, who has been serving at Dominos for the last one and half years, will take over as its new CEO, Varun Berry will be the new executive vice-president and Managing Director.
Kohli, a food and beverages industry veteran, has a proven track record of delivering in key roles across leading brands. An MBA from the University of Wales, Cardiff, Kohli’s stint in India began with Asian Paints as its regional manager. After serving at the Coca-Cola Company for nearly 14 years and leading its business in North, West, and Central India as a senior vice-president, he moved on to Jubilant Foods to become the president and chief business officer for Dominos. With over 25 years of experience, Kohli is a seasoned consumer goods professional. 

Work challenges
Kohli’s new role at Britannia will not be without challenges, industry experts have said. Kohli joins at a time, when the company is facing challenges from the ongoing high commodities prices and steep price hikes, resulting in poor volume offtake. In the April-June quarter, Britannia’s volumes fell by 2 per cent year-on-year despite doing well in the rural market.
Its revenue grew 8.7 per cent on the back of a massive 20 per cent price hikes, as per KR Choksey. That, however, failed to save its margins and bottomline from shrinking.

While Britannia’s net profit declined by 13.4 per cent year-on-year, its EBITDA (earnings before interest, tax, depreciation, and amortisation) margin shrank 274 basis points to 13.5 per cent, which is the lowest in eight years. The net profit margin fell by 233 bps to 9.1 per cent.
As per analysts in HDFC Securities, Britannia is taking additional price hikes to cover the commodity pressure. According to them, bringing the volume offtake back to earlier levels will be a key challenge for the management and Kohli. “Volume growth acceleration along with improvement in the margin will be a tough task in the current challenging demand environment,” they said.